Oil surges to its highest price since 2023, and stocks drop after a weak update on the US job market

NEW YORK (AP) — Oil shot to its highest price since 2023 after surging again Friday because of the Iran war, and a weak update on the U.S. job market knocked stocks lower to cap Wall Street’s worst week since October.

The S&P 500 dropped 1.3% after a report showed U.S. employers cut more jobs last month than they created and after oil prices spiked above $90 per barrel. The combination of a weak economy and high inflation is a worst-case scenario for investors because the Federal Reserve has no good tool to fix both problems at the same time.

The Dow Jones Industrial Average plunged as many as 945 points before finishing with a loss of 453, or 0.9%, and the Nasdaq composite sank 1.6%.

“You can’t sugarcoat this report,” according to Brian Jacobsen, chief economic strategist at Annex Wealth Management. “A negative payrolls number combined with a big jump in oil prices will have traders worrying about stagflation risks.”

Stagflation is what economists call the miserable mix of a stagnating economy with high inflation, and a separate report released Friday added to the sourness after showing that U.S. retailers made less money in January than economists expected. It raised the disconcerting possibility that spending by U.S. households, the main engine of the economy, may be stretched near its maximum.

Usually when the economy is unsteady and the job market is weakening, the Federal Reserve cuts interest rates to give things a boost. Lower rates can make it easier for households to get mortgages and for companies to raise money to expand, while also lifting prices for stocks and other investments. The Fed cut its main interest rate several times last year and had indicated more were to come this year.

But lower interest rates can also make inflation worse. And the Fed’s hands may be increasingly tied because spiking oil prices are pushing inflation higher due to disruptions for the energy industry.

The price for a barrel of Brent crude, the international standard, leaped another 8.5% to settle at $92.69. It briefly rose above $94 to touch its highest level since September 2023.

A barrel of benchmark U.S. crude breached the $90 level for the first time since 2023 and jumped 12.2% to $90.90.

Oil prices have surged, with Brent up from near $70 late last week, as the war has expanded and included areas critical to the production and movement of oil and gas in the Middle East. Much will depend on what happens with the Strait of Hormuz off Iran’s coast, where roughly a fifth of the world’s oil typically sails.

The U.S. government gave details Friday about a plan President Donald Trump announced earlier to offer insurance to ships crossing the strait, but it had little effect on the market.

If oil prices spike further, like to $100 per barrel, and stay there, some analysts and investors say it could be too much for the global economy to withstand.

To be sure, the U.S. stock market has a history of bouncing back relatively quickly following conflicts in the Middle East and elsewhere, as long as oil prices don’t jump too high for too long. Uncertainty about just how high oil prices will go this time around and for how long caused frenetic swings across financial markets this past week, sometimes hour by hour.

On Monday, the S&P 500 tumbled to an immediate 1.2% loss at the start of trading but made it all back and ended the day with a tiny gain.

Trump’s most recent signal on the war was that he wants an “unconditional surrender” of Iran, apparently ruling out negotiations.

In the bond market, Treasury yields wavered, with higher oil prices pushing upward on them and the discouraging updates on the U.S. economy pulling downward.

The yield on the 10-year Treasury initially rose toward 4.19% before pulling back to 4.14%. That’s up from 4.13% late Thursday and just 3.97% a week earlier.

Smaller companies often feel the bite of high borrowing costs more because many need to borrow to grow. Smaller companies can also be more dependent on the strength of the U.S. economy for their profits than big multinational rivals, and the smallest stocks on Wall Street took Friday’s sharpest dives.

The Russell 2000 index of small stocks fell a market-leading 2.3%.

Among the big companies in the S&P 500, companies with high fuel bills helped lead the way lower. Old Dominion Freight Line sank 7.9%, cruise line Carnival fell 5% and Southwest Airlines lost 5.3%.

All told, the S&P 500 fell 90.69 points to 6,740.02. The Dow Jones Industrial Average dropped 453.19 to 47,501.55, and the Nasdaq composite sank 361.31 to 22,387.68.

In stock markets abroad, indexes slumped in Europe following a better finish in Asia. London's FTSE 100 fell 1.2%, while Hong Kong’s Hang Seng jumped 1.7%.

South Korea’s Kospi was nearly unchanged after plunging 12.1% Wednesday for its worst loss in history and then rebounding 9.6% Thursday.

AP Business Writers Chan Ho-him and Matt Ott contributed.

Michael Gagliano works on the floor at the New York Stock Exchange in New York, Friday, March 6, 2026. (AP Photo/Seth Wenig)

Joel Lucchese works on the floor at the New York Stock Exchange in New York, Thursday, March 5, 2026. (AP Photo/Seth Wenig)

Ryan Falvey works on the floor at the New York Stock Exchange in New York, Thursday, March 5, 2026. (AP Photo/Seth Wenig)

Screens display financial news on the floor at the New York Stock Exchange in New York, Thursday, March 5, 2026. (AP Photo/Seth Wenig)

Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Friday, March 6, 2026. (AP Photo/Ahn Young-joon)

Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI), top center, and the foreign exchange rate between U.S. dollar and South Korean won, top center left, at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Friday, March 6, 2026. (AP Photo/Ahn Young-joon)

A currency trader talks on the phone near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Friday, March 6, 2026. (AP Photo/Ahn Young-joon)

Two-time Stanley Cup champion Florida, Toronto, St. Louis and so many of the perennial contenders not being in the mix down the stretch have turned the NHL trade deadline upside down.

The Panthers, Maple Leafs and Blues were unfamiliar sellers, opening the gates for a whole new set of buyers who are looking to take the next step into the playoffs and beyond.

That includes the New York Islanders. They agreed Friday to a deal with the Blues for versatile forward Brayden Schenn, who waived his no-trade clause to facilitate the trade. The teams happened to be staying in the same hotel in San Jose, California.

Schenn, who hoisted the Cup in 2019 and has captained St. Louis the past three seasons, joins a mix on Long Island led by standout rookie defenseman Matthew Schaefer, whose presence has revitalized the franchise since winning the draft lottery and taking him with the first pick.

The selloff in St. Louis continued with the Blues trading 15-year defenseman Justin Faulk to Detroit, where the Red Wings are seeking to snap a nine-season playoff drought. In return, the Blues acquired defenseman Justin Holl, Russian prospect forward Dmitiri Buchelnikov and a first- and third-round pick in this year's draft.

Things are also looking up in Buffalo, where the Sabres added center Sam Carrick from the New York Rangers and defenseman Luke Schenn — Brayden's brother — from Winnipeg to bolster their chances of ending a league-record 14-year playoff drought. The Sabres then completed a separate trade with Winnipeg, acquiring journeyman forward Tanner Pearson for a seventh-round pick.

“It's new for me,” Sabres captain Rasmus Dahlin said of the team adding rather than unloading players at the deadline. “This is why you play hockey. This is what it should feel like.”

Meantime, Toronto joined the sellers by trading fourth-year forward Bobby McMann to the Seattle Kraken, a person with direct knowledge of the deal told The Associated Press.

The person spoke on condition of anonymity because the deal had not been announced.

Seattle, which entered the day holding the Western Conference's eighth and final playoff spot, sent Toronto a 2027 second-round pick and a fourth-rounder in this year's draft, the person said.

Tampa Bay, which has qualified eight times in a row and 11 of the past 12 years with back-to-back Stanley Cup runs in 2020 and ‘21, brought back winger Corey Perry in a trade from Los Angeles for a 2028 second-round pick with the Kings retaining half his salary.

Perry, who turns 41 in May, has reached the final and lost in five of the past six years, including 2022 with the Lightning. The pesky winger has a Cup ring from 2007 with Anaheim and gives coach Jon Cooper’s team veteran experience and an edge.

Eastern Conference-leading Carolina has plenty of skill, and the Hurricanes got tougher in the final hour before the deadline by acquiring forward Nicolas Deslauriers from Philadelphia for a conditional 2027 seventh-rounder.

“This adds depth and experience to our forward group,” general manager Eric Tulsky said. “Nicolas is a strong, physical player who plays with an edge — factors that become even more important as we get to the postseason.”

Minnesota general manager Bill Guerin, fresh off constructing the U.S. roster that won gold at the Milan Cortina Olympics, was active all week and did not stop his wheeling and dealing Friday.

Guerin made a trade with Chicago giving up future considerations for Nick Foligno, the 38-year-old former Blackhawks captain who gets to play with brother Marcus and chase the Cup.

“This time of year is all about depth and understanding roles and pushing guys to push past what they even think is possible,” Nick Foligno said on Sportsnet in Canada. “I’m excited to do that with a team that I’m obviously invested in with my brother being there.”

The Wild, who have not advanced beyond the first round since 2015 and have only one trip beyond the second in franchise history back in 2003, have been active all week. Earlier in the day, they acquired forward Bobby Brink from Philadelphia, sending defenseman David Jiricek to the Flyers.

The Rangers held on to center Vincent Trocheck, the gold medal-winning U.S. Olympian who was considered the top player available on a lot of lists, and Philadelphia did not trade big defenseman Rasmus Ristolainen. Each player is under contract beyond this season.

New Jersey never came close to trading Dougie Hamilton, GM Tom Fitzgerald said.

“There was more noise out there than there actually was,” Hamilton said.

John Carlson went to the Anaheim Ducks as part of a surprising deal from the Washington Capitals agreed to just after midnight. Anaheim sent a conditional first-round pick in either this or next year's draft plus a 2027 third-rounder to Washington for Carlson, a 36-year-old defenseman who has only played in the league for the Capitals since 2009 and helped them win the Stanley Cup in 2018.

Carlson is a pending free agent without a contract beyond this year but was not expected to get moved before the deadline. He joins the Ducks as they look to end a seven-year playoff drought.

Also overnight, Columbus sent a third-round pick in the draft this year and a 2028 second-rounder to the Canucks for Garland, the soon-to-be 30-year-old who drew interest from multiple Eastern Conference contenders.

The Islanders signed forward Jean-Gabriel Pageau to a three-year contract extension. The contract is worth $14.55 million, according to a person familiar with the deal.

The person spoke to the AP on condition of anonymity because financial terms were not disclosed.

AP Sports Writers Greg Beacham and Dave Campbell, and AP freelance writer Denis Gorman contributed to this report.

AP NHL: https://apnews.com/NHL

Los Angeles Kings right wing Corey Perry (10) and Vegas Golden Knights defenseman Jeremy Lauzon (5) fight in the second period of an NHL hockey game Wednesday, Feb. 25, 2026, in Los Angeles. (AP Photo/Wally Skalij)

Chicago Blackhawks left wing Nick Foligno, left, redircts a shot into the glove of Colorado Avalanche goaltender MacKenzie Blackwood in the third period of an NHL hockey game Saturday, Feb. 28, 2026, in Denver. (AP Photo/David Zalubowski)

From left, St. Louis Blues defenseman Justin Faulk, defenseman Philip Broberg, right wing Jimmy Snuggerud, and center Robert Thomas celebrate after a goal by Thomas during the third period of an NHL hockey game against the Seattle Kraken, Wednesday, March 4, 2026, in Seattle. (AP Photo/Maddy Grassy)

New York Rangers' Vincent Trocheck (16) reacts after scoring a goal during the shootout of an NHL hockey game against the Pittsburgh Penguins Saturday, Feb. 28, 2026, in New York. (AP Photo/Frank Franklin II)

FILE -Washington Capitals defenseman John Carlson (74) in action during the first period of an NHL hockey game against the Nashville Predators, Feb. 5, 2026, in Washington. (AP Photo/Nick Wass, File)

Vancouver Canucks' Conor Garland (8) watches as Winnipeg Jets goaltender Eric Comrie (1) stops the puck during the third period of an NHL hockey game in Vancouver, B.C., on Wednesday, Feb. 25, 2026. (Ethan Cairns/The Canadian Press via AP)

Vancouver Canucks right wing Conor Garland (8) looks to pass in the second period against the Seattle Kraken during an NHL hockey game Saturday, Feb. 28, 2026, in Seattle. (AP Photo/Kevin Ng)